TNC Tennant

Thomas Paulson SVP, CFO & Principal Accounting Officer
Chris Killingstad President, CEO & Director
Andy Cebulla VP, Finance and Corporate Controller
Christopher Moore CJS Securities, Inc.
Marco Rodriguez Stonegate Capital Markets
Call transcript
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Good morning, my name is Jamie, and I will be your conference operator today. At this time, I would like to welcome everyone to Tennant Company's Fourth Quarter and Full Year 2017 Earnings Conference Call. This call is being recorded. There will be time for Q&A at the end of the call. [Operator Instructions]. in Conference Fourth Call. participating Year and for Earnings XXXX you Tennant Quarter Company's Full Thank Beginning meeting today's is Mr. Tom Chief Paulson, Financial and Officer for Senior Tennant Company. Vice President Mr. Paulson, you may begin.

Thomas Paulson

fourth everyone, Paulson, Tom Vice President Officer to Good call. Financial Senior and Chief Tennant Jamie. earnings conference morning, Tennant Thanks, Company's of quarter and XXXX I'm welcome Company.

Secretary. today Cebulla, Jeff Finance General of Controller; full and we Vice Cotter, for Counsel outlook are Vice Today and Tennant's Killingstad, Corporate XXXX. the our XXXX President Tennant's progress core Chris me fourth review President Joining and quarter Andy President, Senior on and CEO; will strategies, and during Corporate year and our performance

up operations then on First, Chris the you will questions. I'll and brief call the for we'll financials. our open cover After that,

conference along to A will using these hope March to call. We for makes call this call it results. be XX, review at on our Investor this XXXX. until conference are with We this slides Relations accompany you website our easier following available slides replay of this

affect encourage Exchange safe description We uncertainties news the our may our documents and for Commission. a remarks Now our be in to differ to of statements and we documents, release actual statements. performance. the expectations begin, the morning risks and questions from please risks contain of today's materially advised contained results regarding company's are with Securities that uncertainties results. answers and statement, risks forward-looking are those statements and This before and described and subject review that harbor Such filed the future particularly may the our uncertainties we may to you those our this in

non-GAAP we exclude Additionally, will include items. nonoperational measures this or on call, that conference or special discuss

non-GAAP quarter the XXXX. XXXX. special provide GAAP were There For in fourth no There the non-GAAP directly also comparable non-GAAP measure, we items the measure. and rest were will special most in items each of

of reconciliation our these measures a GAAP includes these non-GAAP release our earnings quarter to -- to GAAP fourth XXXX Our measures results.

is Business website. At via this Our Investor earnings this and release posted was over our to on call morning Wire turn also point, the I'll Chris. issued Relations

Chris Killingstad

the for Thank by In begin of growth in and we goal. during all management history. achieve. time that revenue strong first change untouched had to optimal XXXX XXXX, pleased transformation. for few context. like resources put morning team you, We challenges. ambitious and to organizational I to to this our significant this some the exceeding thanks toward our wins, billion in of want took report the ability in business by Very am remained experienced areas we also to vision by we joining us. year, achieved improve annual big in we took putting strategic to in our we some has QX, our And that The I'd our business the Tennant and and long-term right-size create success. to steps admittedly and places Tom, important steps and milestone $X for a you an major

region, channel. of and significant Our the executed better IPC, sales over are acquisition both revenues global to expect strategy we category as Tennant's largest time promising our and with in result diversifying With enabled product we these revenue cost resources history. aligned enhancements. and of our opportunities, further us This growth a by improvements achievement

with formidable we team, and ability confident anticipated integration track, remain IPC is high dedicated in people, next a product to remains customer a over and company the IPC three robust management strong on years. offering achieve synergies Our our loyalty.

Further, launched XX as our and new target business our products move and of vitality and product was offering again innovation product continues and our variants, robust a churn a new better forward. creating In XX%. and index above core we organization products strengths our to these Tennant of pipeline remains out preserving to committed on are focus We technologies. our combined once XXXX, strong,

Finally, steps made our made made But initiatives and realign we control. the workforce growth investments during term in support have done. with these strategic within to gaining XXXX. Much the in initiatives we to and remains moves QX our as and We been capabilities experienced be to move manufacturing this strategic, into company's XXXX. our are global performance-enhancing year took the to momentum long progress challenges service important some We improve we operations. important and

contribution that XX% adjusted For both grew the net impact reflect keep On amortization assets. the an adjusted totaled mind our Please million, in per XXXX in IPC to intangible organic fourth quarter, reflecting net basis, $X.XX and sales quarter nearly reported the the earnings IPC. $XXX EPS grew sales and for accelerated of from overall consolidated share. X.X%

were challenges gross to quarter, carried the the there that While which margin in fourth quarter over several during the positive we of I'd in areas saw continued momentum year, most from earlier like highlight. of were

as we and year progress continued in of and make staffing filling needs our to ended historically normal an at service mentioned levels. profitable turnaround important experienced us to meet First, the a to service enhanced field as allow our growth. operations I our and step customers the to we This return before, trucks is our service

stabilized showed operations quarter. improvement the and manufacturing our throughout Second,

and drive to technology, made labor. with skilled have efforts new robotics in efficiencies investments We

All of bode these well items for XXXX.

sales and XXXX. positive will during quarter, accounts, in saw believe momentum continue strategic we Third, into this the especially

growth. EMEA of best our organic regions in And over the we've to each growth we Importantly, XX-month have period contributed our in years seen global region. XX

which region a growth APAC, the and to with exceeded our pleased also challenged quarter. within expectations returned historically, are We

long-term in deliver shareholder Tennant's ability we we As plan to value. are growth and confident discussed, its

to being streams structure cash investments; dividends by reduction, improve plans investments, cost debt with recognized robust strategic balancing our repurchases; committed products; open-minded fuel and our regions and go-to-market building customer shareholder expanding to on geographic new our the segments drivers position right growth and managing are growth strengthening growth leadership operating successfully new on flow, to address IPC our about and further optimizing share revenue to all of the growth integration to value. We strategy diversifying potential across continuing supporting opportunities sales pipeline; organic technology our our while efficiency, and and product our completing enhance solid and financial inorganic growth focusing our

plan IPC values same Before Prior all shareholder announcing it enhancing path the way a by in acquisition shareholders. forward the with idea evaluate review to concept our we to potential to concluded with Tennant that that company's I concluded its input turn over ultimately shared across its welcomes forward I of range And its considered thoroughly shared and goal part company's We the value. a the the in put IPC reviewed of transactions, and merger PrimeStone. best of interest as open shareholders transactions the Tom, the in strategic that briefly industry enhance including to the After by options consultation the multiple the enhance address times regular mid-December. toward want was to continuing was communication represents that and have best years potential board, constructive Tennant best of we regularly acquisition, direction, over of and shareholder value. of the is many of potential suggested the advisers, execute the value. business PrimeStone, evaluating by was to shareholder

with decision. confident we've With the IPC that the made that in remain date integration, to significant we highly progress

improve costs As major significant IPC, we you Tennant to capabilities was completed executed for to our heard made change during support manufacturing the and a service restructuring of XXXX acquisition largest growth and today, a and year in functions. of lower Tennant's acquisition initiatives; to key which investments history; the significant company's

result, deliver we plan beyond. shareholder long-term positioned team value As continue to the believe to strongly board on in are XXXX deliver a our and and management growth that and

will financial Tom? I Tennant's to you take Now through fourth Tom ask result. quarter

Thomas Paulson

a Thanks, per as-reported references Chris. XXXX loss. diluted except result, comments earnings basic the shares with the to average calculated for on outstanding were the today, due GAAP to net which basis fully In my weighted share

earnings the per of financial acquired which our are in beginning However, share Group, a performance that results basis. IPC diluted at calculated XXXX non-GAAP XXXX. April on financial include Also XXXX of note the fully was

quarter XXXX our and performance. results the out of first organic the As last broken is a part IPC quarter beyond be will the reminder, of that, where that will be

As Chris we we in fourth view business results position better operationally to XXXX. strategically the XXXX it's through reap move throughout goal. benefits efforts our as for as earnings quarter the important the sales and highlighted, efforts expansive and context to expect to continue long-term of both our improved These

For the On or last rose million roughly X.X%. net XX, an quarter period higher the fourth XXXX, sales reported to year. sales of Tennant same XX% $XXX compared basis, ended organic December

of the by acquisition a impact net exclude Our of X.X% exchange increased about and impact foreign favorable XX%. organic currency the results sales that sales IPC

[Technical line, Looking fourth intangible to IPC Difficulty] assets XXXX at related the the bottom of quarter acquisition.

of fourth XXXX now Turning quarter. detailed review to the more

As economy both in slight better categorize regions Japan, expectations opportunities. Asian on accounts. X.X%, Performance and posted in fourth geographic a lastly, and to grew region and quarter XXXX sales XX.X%. [Technical XXXX improved than Latin North organically, X.X%, quarter. XXXX promising America; growth top XXX.X% consistent Mexico. encompass the fourth most third in organically. America America, Pacific, sales improved America. all Latin quarter region Americas, covers EMEA, America three which stable strategic Americas, we reminder, performance, generate Difficulty]. a and period North particularly And Australia Europe, early in the able reported and Africa; patterns which includes which were our of order in In a fourth which operator America the sales and X.X% in regions, Middle our sales on restructure and, Latin X.X% in up more to sales are, growth markets. up the Reported organically, In the with are EMEA, in quarter, were that quarter Asia improved company's into Organic in our strong this grew still by driven North Is a global also to reflects and steps we basis online? support East the the which China, the XX% growth We the of each workforce primarily we gains global other strengthening in reflecting X.X% Brazil our organic In pleased took sales fourth


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Thomas Paulson

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Thomas Paulson

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Thomas Paulson

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Thomas Paulson

then, I Okay. apologize this Slide will repeat for that and I inconvenience at the through out there everybody X this. and of I'll for part move start here. we'll

year. last XX, sales On an ended are net higher of Tennant's XXXX, quarter to December same fourth XX% reported sales million roughly the period basis, compared X.X%. organic For rose the $XXX

Our by and IPC results a currency organic net impact foreign exclude about XX%. of exchange acquisition of that favorable the sales impact sales X.X% the increased

line, or Looking fourth net bottom quarter per share. at XXXX $X.XX $X.X was million loss the

Our strategic tied to application, the results special reduction the tax items. these Together, by million. are law items reported directly or items the for in lowered impact of $XX.X these reflected several quarter Except initiatives. change either growth cost earnings

Jobs or of estimated million $X.XX breakdown. or a and announced share termination; previously the efforts tax per related $X.X share income from charge restructuring impacts per $X.XX is million Here a to pension share; of share cost million per or the IPC IPC; Tax XXXX. $X.X of related $X.XX to or provisional Act and the acquisition reflect million $X.XX Cuts U.S. plan to per charge of of $X.X $X.X integration costs

per Excluding per net the net earnings reported year-ago of comparison, earnings special quarter. share. By million in $X.X of $X.XX $X.XX or share reported $XX.X or Tennant adjusted items, these Tennant million

the Additionally, $X.XX the it quarter charge related include million our is assets per worth IPC share accelerated noting $X.X intangible amortization to a acquisition. or pretax from results fourth of of

a to quarter. review the fourth Turning more detailed XXXX for now

Africa. quarter, a to reflecting As sales fourth global Americas, generate America gains North leadership sales solid America, driven sales Scandinavia. X.X%, Europe, in here all fourth Results fourth Japan each the into in in ahead which grew able we're East more sales global categorize our sales up The XX.X%. accounts. our regions, that in invested X.X% the patterns Australia XXXX markets. quarter in and region organically, the we in North have and than were the quarter, is trends we increased the fourth EMEA, which Pacific Organic which America lastly, America. slight Americas, covers early In In promising we are restructure in of In the organically. and region. X which China, reflects in in in performance of and fourth and within also in Pacific, or regions took and And with growth and consistent North our reflect America. improved up Australia, which primarily this Brazil reminder, reported X.X% top led Iberia, X.X%, a Mexico. both basis encouraging encompasses Middle and quarter Asian organically. approximately up which our organically. by the the order period XXXX improved improved America the XXXX quarter. organic XX% X.X% and In geographic sales Latin includes Performance of economy company's X.X% posted workforce performance, grew XXX.X% expectation improved growth sales our region strong the strategic in by on up recent China, strengthening the Latin Asia growth in organically, to XX% X.X% in stable region, quarter XXXX Latin most in particularly to a sales APAC was other as pleased growth Reported were We better on support third Japan, Asia team and opportunities, the and steps Netherlands sales EMEA,

to Tennant's inefficiencies basis the gross quarter. IPC productivity XXXX Now remaining gross material points as-adjusted mix manufacturing cost strategic XX.X% the gross field service accounts, fourth lower-than-anticipated raw higher was and looking was margin. XX.X% change and The quarter from truck in compared levels at of XXX and impact margin and prior-year as-suggested margin the negative reflects in the inflation. XX.X%

annual The we through as XXXX. these factors, in or million progress in expense $X.X of R&D XXXX have million late timing we in X.X% and expense previously, provided That totaled discussed in X.X% lower which spend technologies new or the we to R&D quarter administrative noted. negatively Research We percentage fourth XX.X% of quarter. initiatives to to As expect of the have X% Selling pipeline sales. place remain address stated maintaining to products related of of S&A course the impacted prior million improvement was These of of during includes by This the amortization $XX.X $X.X or million the sales. in expense and $XX.X IPC project development the to innovative X.X XXXX further move the million our and robust and revenue X% sales accelerated $XX in that year. points and quarter quarter. nonoperational costs. fourth items fourth committed over a reflects Chris of compares of year spend quarter and

remain we for has delivered X% which acquisitions enthusiastic IPC, acquisition. since Tennant, Regarding growth the organic nearly about this very as prospects

does we which noted now accelerated As will schedule amortization believe the we in quarter, the impact last of accretion, XXXX. occur timing

integration continues our amortization, IPC a However, be and earnings performance excluding off accretive accelerated solid From in to positive our perspective, the return IPC will XXXX. start. a efforts deliver to to are

amortization the measure noncash for going be have taxes, quarter, acquisition. will expense last we of accelerated higher that before an discussed expense depreciation impact interest especially amortization considering Tennant the now forward, from and of resulting the and interest, we As level earnings important

quarter was fourth $XX.X million sales. in XX.X% quarter $XX.X XXXX million Adjusted EBITDA or or prior-year of Our sales. EBITDA XX.X% was the of adjusted

XX.X% or business Looking $XX.X prior while XX.X Adjusted striving inflation expenses. line at EBITDA across operating scalability help sales. growth, globally every the profit driving year, can remain simplifying as standardizing cost committed measure. year was include $XXX.X model, flat percent that We improve for of million manufacturing of was full in increases the of at initiatives adjusted for EBITDA our fixed organic continue profitability processes to or volume holding the These million us XXXX areas net our and minimizing improving and our X the to essentially rises, revenue in gross sales.

that of The overall Looking rate which higher effective unfavorable guidance full at the was an due tax foreign for rate. year mix XX.X%, the to earnings our in fourth as-adjusted is quarter. tax experienced than we XXXX

some of sheet manufacturing CapEx to in quarter to fourth quarter flow equipment. balance million compared development planned million $X.X tooling and product and Current $X items. the XXXX. of information expenditures Turning cash to in projects, reflect technology the continues Capital XXXX investments in related to fourth totaled new

to million at the operations quarter solid managing from of cash we to continue additional Tennant's fourth for in an repaid fourth the We In tightly $XX.X quarter. $XX.X our compared spending. was capital debt. million million XXXX quarter, fourth the $XX

the at quarter. Our fourth XXXX ratio of end was debt-to-capital XX% the

our of paid Tennant $XX other capital and $XX.X Looking allocation. in cash dividends million in at aspects million XXXX XXXX. of

for full Moving to the year XXXX. outlook our

enhanced strategies improvement. both operational we As for Tennant growth place position Chris to stated, in and revenue have

While headwinds quarter strides during mentioned, enable fourth into move we we XXXX, XXXX. improvement as made in gross we margin as previously continue we to face margin the good to

take measures gradually hold We the year. as through to expect we these move

full anticipate the billion For $X.X full includes to an estimate be $X.XX. in up range to billion, $X X.X% earnings million a to for to we basis, the range XXXX, On year. approximately charges. GAAP X% to we X.X% year the in organically up anticipated net acquisition-related This $X.XX or $X sales of of million of $X.XX

share, $X.XX charges, earnings we million these $X and adjusted be the per to be $XXX in range to EBITDA $XXX million. of anticipate Excluding to to

of adjusted of approximately Our reflect year for higher noncash the also the per earnings $X.XX guidance amortization reported impact share. expense

strategic Reasonable in XX% legislation in America; of the and XX%, million Our of X% expense million, range the impact tax outlook North of to new XXXX approximately XX%; of to X.X% of include sales; rate following gross in the region, all $XX R&D inclusive in U.S. capital an the $XX effective expenditures growth from range margin the annual especially in of the range in the additional accounts assumptions. performance the

the additional quarter some of announcement, we Due guidance in for first R&D higher the expect in to level items uniquely due noted period. the XXXX morning are we impact this As that specific product anticipated to including lower along the lower X normally will be slow earnings quarter first quarters. quarter customers' earnings, which ramp first of remaining up our to quarter spending the the initial first purchases, with capital than support launches new reflect

include The earnings causing the and year. of first acquisition-related to IPC, quarter lower be expense amortization additional the will prior an than quarter interest for also

up we'd As And quarter will company a anticipates in first per $X.XX to a to per call like the open be share questions. XXXX $X.XX Jamie? now, the adjusted range of result, to earnings share. the


comes And Moore from Instructions]. Securities. first with [Operator your CJS Chris question

Christopher Moore

with X% the being able in the growth. the about during or start possibly you increase just price In Maybe prices call, potential organic there? XXXX. of X% last raise talked X% to Is embedded

Thomas Paulson

organic year. Yes, our And little that year specific, we just benefits the embedded lower. roughly pricing that pricing upcoming X.X%, the is growth. pricing XXXX, maybe a have without bit in the in think getting was similar we We X% in real benefit had exited, a we'll

Christopher Moore

Got isolated there strategic that sounds QX, Is couple on It like still pretty things A particularly you. Europe? doing the to front the much progress strategic of America accounts, North in or is conversation account were well. much

Thomas Paulson

America accounts, I be North in also. in particular but Pacific account an more our XXXX expectation the business. growth Asia But was important mean, nice But and the also that on our Europe, part of our strategic QX world. they'll I note strength strategic of of anywhere in a we in the matter are in than particularly accounts strategic progress, making say will in

Chris Killingstad

-- free momentum to and issue all mean, and is in strategic kind And as that process. knew Germany to note, complicated up France be XXXX. in in won unusual to in it And all the see you that a continue we we're quarter third XX.X% sorry, continuing have in should really pipeline. important XXXX, of to quarter, I know, XXXX, strategic pleased momentum going we they and growth had long And negotiation and the we in faced started XXXX. North the is see major of them was were. going that the Europe, But which that to into two one contributed one they to America that But benefits that delayed to But to continue these accounts rate. is the to accounts we it's fourth in it's extent we

So is strategic accounts we track would North America I are what back say. with with on

Christopher Moore

Terrific. Got Maybe you. margins. to just switching gross

and Maybe through we the second of kind the key You there. account. with four strategic could one, of went start talk the items -- mix IPC

against intangible margin to IPC on XX%, to terms the all get trying more the make that gross understand to back if XX% to strategic those in range? after the amortization's said, IPC -- do accounts, So of -- run gone difficult -- still they

Thomas Paulson

It better on of against a it's really did. in margin Tennant force a but important than has works a IPC, that gross forma basis from margins case standpoint, a basis historically note us I that IPC standalone think is the to on pro EBITDA

of EBITDA, IPC a basis had okay. on manufacturing XXX and we then quarter, still margins. the basis need other to to margins, from try So though One, business, and forward distribution, margins at lower bigger is key Chris to was we indifferent that prior, channel And in level significantly in be ago our might that's stronger -- going exited especially gross And the try our miss EBITDA XXX the think highly to to the quarter quarter gross the the We're be we efficient targets accretive mean, of to also piece said, XX% we be -- close were have mix And piece point on of and in much strategic had the that having in some a it below even have -- gross standpoint. versus the inefficiencies. they thing. that an quarter. and margin we're two be should is strategic unusual we while and business EBITDA. accounts of I the to And impact their to lower where we EBITDA model through notable the year enhancing service above things. same moving due case level, out accounts, points it's the we

Christopher Moore

could gross The last bit? you the raw inflation, little it. cost material margins. about that And talk Got on a question

Thomas Paulson

And bit really expectations plan, we've us the original is good our when was we've place will the stabilization our it Yes, allow the our appropriately to stabilized still pricing it cover news. put that that inflation and above stabilization. in we through through, I mitigate reduce and and mean, an efforts But be to that XXXX. it think assumption. And both our pricing the cost, seen in it's can margin won't upcoming have through year. from important feel that inflation, we a seen but we sourcing detrimental in to we our structure that

Chris Killingstad

and that to in our Part to expect also supply stick now gross XXXX. the to help of some them goal smoothly. inflation talent organization inflation stated obviously price to to a do We the operating areas allocate at accomplish We've is not line. addition get we to in we team to and restructuring in That in opportunities. that margin X place talent of the the restructuring provide benefits is the major net was in the did our enhance And greatest XXXX. offset because that did us that of


Instructions]. [Operator

question next Rodriguez from Your from Marco Capital Markets. Stonegate comes

Marco Rodriguez

of back here accounts. I strategic if could on was kind around we wondering circle

bit little Just the dive through strategic you just North that deeper, the or little kind a in of if just of if pipeline? accounts transition of of And you wanted accounts just can, track how that about made are you working kind on could kind sales move about kind how of within the back fiscal bit you 'XX? to in you where many America. expect Maybe more that guys comment talk be to processes, a kind talk maybe might strategic

Thomas Paulson

the on we through bit year a through we we're coming And back impact and one we expected, and we half open we the we renewals QX Well, couple patterns fourth historically is we order part in nice this a of a on positive comments. bullish I'm We deeper. on position, more always too. going sure And order year. And mean, is, And why expected as strategic reasons lot business. did win have to all do through period of see were go quarter. important tend last and of track. news with way will while to of back And penetrate solid there of the the knew is have throughout I to QX this Chris encouraging that. the therefore, a didn't year was accounts a business come well. a that the the ended on. it's And jump

Chris Killingstad

Yes, say I'd accounts a just we very are to have mix the in nice that big quarter. retailers some existing, first of online strategic come that especially starting

new not are And building including customer that segments, have had various business before just in contractors. Some we those service to also starting come online.

think from contracts. I actually stages we're the at the of -- early value in So extracting the these

also equipment going forward benefit And are it a basis, in kind I think to quarterly cases the the So for XXXX. us going X because it's well some bodes supply contracts into X or years, XXXX. on we and

Marco Rodriguez

be of the risk know, fiscal little any that do guess, again? kind or coming accounts large don't And 'XX, obviously renewal helpful. quarters that I sort very delay have time they I a That's strategic periods of, I you where you amount in -- a might don't have for of up being know, bit that

Thomas Paulson

on specific I that. Yes, we on being side on that. mean, can't end we the the negative get up up or side positive

being big business wouldn't lower. a have. is to different the QX it bit due Sometimes low should the just revenue surprises, positive the in expect points. that our And as of year a expect the in typical a than historically little sometimes QX are QX, we and total. percent negative. But any seasonality But I of upcoming summer, standpoint always from QX is we year seasonality point are you the in the

Marco Rodriguez

Got it.

shifting the seems The given field XX%, field be comments here manufacturing. service IPC have that margin took the some automation the Okay. to underway you your service into acquisition. of trucks, from And here what that you've getting area I improvements of gears your kind initiative adjusted XX% to then some as to well back kind the on from rate bring of gross the as

put of with at kind a if target that still you XX% confirm trying -- on of rate. at normalized there end that that to to of QX, quarter, the of last be that track that XX% think I are kind I'm guys just guess? you I kind you'd guidance, out

Thomas Paulson

Yes, being we that conservative. hold We hope we to guidance. would are

but We didn't the I have in the data would as Given training news. our I And We also. the fast to ended normalized in trucks. attrition QX way and a most open a normal X place. mean, normalized service back it trucks, I gave efforts. that relevant. as open really good that's was we'd seen liked, We mean, we've we of had were recruiting good improved amount quarter level probably all point you happen our efforts. a of improved

upcoming people this we trained that bode late see us we for XX% previous just years. as XX% -- get exit So well the X or hold quarter allows expected to those but improvement up in to point didn't to of to example QX. should as should back That's the to be exit But current in that it a the early good We will our it quickly. up, year, should expectation.

Chris Killingstad

on and all satisfaction. our getting running manufacturing They expectations other front, issues welding shifts robots our some on are we the meeting, And running in to cases and getting had thing the exceeding, now of some up our benefits. and then we're the three

we And the to is fully we've now is right a practices, now recruited. long a digits, made you last the really And best XXXX. we were news good that XX turnover the our bodes low factory, the are many the running time. And is have like in they're and well think changes other had much on manufacturers well what turnover for have basis had we seen through some labor, labor. bodes staffed. months pay something skilled we I future of And at over changed issue in what know, when it But single efficiency. attracting is which know in The how XX%-plus much they doing we for is you the pretty benefits is monthly as stable

Marco Rodriguez

to your the level normalize back up you if you end QX. back I'm back to be. make to at already just And exiting kind QX, of a the individuals here expected XX%, like it. training that sounds fully given field it Got you where understanding up, will, sure XX%, it is being of service automation them had that got Kind to so of to target

it's assuming to quarters they quarter new are of to X most effective? up train service about kind I'm people So a to where the

Thomas Paulson

you'd trained. say, The you're brought numbers does you it likely it's a Being we average little to would them fully for that to And them staffed where at as right. year, off are at where XX a we on, be days enter look you but level takes of new longer at people like. are sheer is take bit sometime you they When the before towards what the going But XX efficient. completely going operating are a fully years, it's those it people is folks get vary. be while. to during QX more The

Chris Killingstad

of performance kind changes process we've even lot enhance dust our instituted to settles. for once the But a them of

veterans tricks had the have term. even some to learn in here short the new So

So to pretty should that's on I ability by a QX, track much be But impacted perform. we from back think training our standpoint.

Thomas Paulson

both Yes, it though. where we we I important take from It's us were, strategy in year. we're enter as time areas back those going where we note get at that very to good still standpoint, to the is think to to feel of a

but we we remain the changes So we we made. hope conservative, like

Marco Rodriguez

Got it.

two Okay. here real kind just a then modeling items from of And perspective. quick housekeeping

you expenses in about one-time after million S&A if QX. out. other normalized And take to expenses $X any level shares my about a don't lastly, the the million QX, If million in I S&A pointed from forward of onetime then $XX.X you up basis? at missed QX right, that Is math Your doing what those guys $XX.X is but weighted there I'm be out model thinking in that sort items? adjusted or going know average should I the on we was call, for this that

Thomas Paulson

is full in there the Andy take XXXX, things on just let I'll is over in in for year our look across shares first And questions weighted $XX S&A two million. average second. accelerated that a QX is over that amortization The the you in you million that'll first. jump to need I'll of Yes, be expense. $X look at in the

on that we kind get of to had quarter's that did to Remember you we're beginning environment. to year have growth our manage need fully a it. S&A. open of of come another other lot And the a it of have worth in is we a positions we adjust So those as replace expenses and in lower IPC there will element sense the that

leverage as a year. revenue. the percent the to as to aren't last are to That's a question. answer to improvement Xx So restate going year, But for a improvement in we long-winded we of some you see push upcoming drive significant still complicated going

Andy Cebulla

average And are adjusted XXX a XX the weighted basis. on shares


over turn further management I no are would closing to questions this call remarks. there time, to Since at the for like

Chris Killingstad

you. Thank

So we diversified long-term Tennant we in in streams. are growth that invested shareholder shape revenue to is will a value platform believe for more take formidable and continue XXXX. building

the the We are technology. across execution best destination all sales achieving anticipating geographies. stronger remain for We

We that capital strategy value Be are sharing for time Thank shareholder you today, strength to could forward for the in your strategic We future improving multiple for a our efficiency long-term detailed and model your and and increase year. this questions. look well, and financial plan more everybody. later on delivering ways. the operating allocation


conference today's concludes call. This

You may now disconnect.